Vital Energy in Tulsa reported this week it had record oil production in the fourth quarter but also revealed a net loss of more than $359 million. It also recorded a full-year loss of more than $173 million.
Vital indicated its plans for 2025 included lower capital investment levels and slightly lower oil production.
In announcing its quarterly and full-year results, Vital said the $359.4 million net loss came with adjusted net income of $86.5 million and cash flows from operating activities of $257.2 million. It also generated consolidated EBITDAX of $383.5 million and adjusted free cash flow of $110.8 million.
Fourth quarter production was a record 147,800 barrels of oil equivalent a day and oil production of 69,800 of oil a day.
Vital’s full-year performance included a net loss of $173.5 million, adjusted net income of $270 million and cash flows from operating activities of $1 billion. The company also generated consolidated EBITDAX of $1.3 billion and adjusted free cash flow of $232.8 million.
Its oil-weighted inventory incuded 925 locations and 400 of them broke even below $50 a barrel WTI. Vital also saw a 12% increase in 2024 of its proved reserves of 455.3 million BOE.
At December 31, 2024, the Company had $880 million drawn on its $1.5 billion senior secured credit facility and cash and cash equivalents of $40 million.
“We strengthened our business in 2024 through enhanced scale, optimized assets and a lengthened runway of high-quality inventory,” said Jason Pigott, President and Chief Executive Officer.
“We successfully integrated our largest ever asset purchase in the Delaware Basin and early results positively impacted our operating and financial performance. Vital Energy continues to show that our talented people can capture important synergies from acquisitions while expanding inventory.”
He went on to state that reducing costs and maximizing adjusted free cash flow generation are among the company’s primary goals in 2025, in addition to absolute debt reduction and extending and enhancing the company’s existing inventory.
“Our inventory provides us with ample high-return development opportunities and a strong outlook for Adjusted Free Cash Flow generation. Recent operational achievements, like horseshoe wells, are creating new efficiencies and allowing us to develop highly productive, stranded leasehold. We will continue to focus on optimizing our asset base to achieve our cash flow and debt repayment targets.”
Investments included $190 million for drilling and completions, $22 million in infrastructure investments, $8 million in other capitalized costs and $6 million in land, exploration and data-related costs.
Operating Expenses. LOE during the period was $8.89 per BOE, below guidance of $9.35 per BOE, as the company integrated its Point Energy assets. Lower expenses were primarily related to reduced workover activity on the Point Energy assets during integration.
Vital Energy’s 2025 development plan has lower capital investment levels and slightly lower oil production. In 2025, the Company expects to generate approximately $330 million of Adjusted Free Cash Flow at $70 per barrel WTI.
Capital Investments. Vital Energy plans to invest $825 – $925 million in 2025, excluding non-budgeted acquisitions and leasehold expenditures. Efficiencies and lower costs are driving capital investments approximately 3% lower than earlier projections while expecting to complete approximately the same net lateral feet as in 2024.
Production. The Company expects total production of 134.0 – 140.0 MBOE/d and oil production of 62.5 – 66.5 MBO/d. Production is approximately 3% lower than earlier projections. The shortfall is related to operational delays and the underperformance of a seven-well development package in Upton County.
Operating Expenses. The Company has made significant progress reducing operating expenses through integration of its Point Energy assets. Some workover expense was deferred from fourth-quarter 2024 into the first quarter of 2025. Average LOE for the two quarters is expected to be around $9.20 per BOE, putting the Company on pace to achieve LOE below $9.00 per BOE by the end of 2025.